Natural Gas Forecast (and Forecasting Template) for September 2024

By Wojciech Gryc on April 30, 2024

This article is a forecast for natural gas prices, but also a template we are sharing that will inform how the next iteration of our product will show forecasts. For a broader discussion, see the appendix.

Forecasting Statement: the price of Natural Gas (MMBtu) continuous contracts (i.e., NG00¹) will be over $____.

General Information

Natural gas is the largest source of electricity generation in the United States, powering 43.1% of total electrical consumption in 2023². It is only second to petroleum when looking beyond utility-scale electricity generation³.

Expected Demand
(will drive price up)

Demand for natural gas is likely to increase, particularly in the US. This is going to be driven by secular trends in consumption (i.e., consistent increases), combined with supply numbers⁴, and potential slight reductions in production. The summer is expected to have increased demand (and thus prices) for natural gas⁵. It’s important to note that 2024 is already shaping up to be the hottest year on record⁶, which will further put upward pressure on natural gas prices.

Energy Alternatives
(will be neutral or slightly drive price down)

Natural gas is seen as a “green” alternative to coal. While other renewable energy sources (e.g., hydrogen) and nuclear power could eventually push natural gas demand down, this does not seem to be the case for 2024⁷.

Geopolitical Considerations
(will be neutral or drive price up)

Global demand for natural gas is expected to grow in 2024⁸, with exports from the US assuaging some of this demand. It’s unclear what sorts of geopolitical events are likely to drive prices down. Prices are more likely to be driven up due to conflict, supply center outages, or other unforeseen issues^{9 10}.

Price Forecast

As of April 30, 2024, continuous contract natural gas prices are hovering around $2.00. Given the price pressures above are likely to push prices up rather than down, we forecast prices to hit $3.00 or more by September 30, 2024.

Appendix

Since launching Emerging Trajectories at the start of 2024, it's become clear that forecasting is just one of many use cases that people are trying to address. Many of our initial users are researchers who want to make sense of a complex situation, explore lots of documents, or create content about a specific scenario, rather than make explicit forecasts. As we keep iterating on our product, we will continue desinging a front-end that doesn't require coding, and one that provides reesarch agents that can automate tedious tasks for policy analysts, risk professionals, and others. The template above is how we'll structure documents, in that they will provide different types of research/information, but the actual forecast can be disconnected or not even used, if one wants to create their own.